WASHINGTON -- For the third time in three weeks, the U.S. Senate Judiciary
Committee decided to take no action on the controversial Induce Act aimed at
illegal file swapping on peer-to-peer networks.

Written by Judiciary Committee Chairman Orrin Hatch (R-Utah) and the
committee's ranking Democrat, Patrick Leahy (D-Vt.), the Inducing
Infringement of Copyrights Act of 2004 (S. 2560) would permit individuals or
corporations to be held liable for infringing acts that "they intend to
induce."

Critics of the legislation contend the Induce Act goes far beyond the
intended P2P network targets to include consumer electronics manufacturers
and Internet service providers (ISPs). Opponents claim the bill would allow
content owners to sue makers of digital media players on the grounds that
the players encourage copyright infringement. ISPs could possibly face
litigation under the provisions of the bill for allowing P2P networks to
operate on their systems.

The legislation has gone through four rewrites since Hatch introduced the
bill in July and promised "to get something done" about the widespread
copyright infringement on P2P networks. The bill was scheduled for a markup
in Thursday's Judiciary Committee meeting.

"While I do not contemplate action on this bill at today's markup,
negotiations will continue this afternoon to perfect language that will
bring an end to the rampant abuse of copyrighted material, for example, by
some file sharing programs," Hatch said. "At the same time, we must protect
the rights of legitimate technology firms to develop faster and better
products."

Hatch said he hoped to bring the bill up again at next week's judiciary
markup, which will likely be the committee's last meeting before Congress
adjourns for the national elections on
Oct. 8.

"If I have to, I will lock up all of the key parties in a room until they
come out with an acceptable bill that stops the bad actors and preserves
technological innovation," Hatch said.

As currently drafted, the bill states, "Whoever intentionally induces
[copyright violation], by manufacturing, offering to the public, providing,
or otherwise trafficking in any product or service, any violation ...
shall be liable as an infringer."

The legislation says the inducement must
be "intentional" and defines that as "conscious and deliberate affirmative
acts which a reasonable person would expect to result in widespread
violations."

The Competitive Enterprise Institute recently argued in an article that, "While the bill requires an actual copyright violation for
an 'inducer' to be held liable, one cannot prove a copyright violation
without going to court. That opens wide the door to legal actions designed
to chill technological and economic activities a court might construe as
inducing a copyright violation."

Yahoo , Google , SBC
and Verizon , as well as a number of other organizations including
the Consumer Electronics Association, TechNet and the U.S. Internet Industry
Association, have also aligned themselves against the latest working draft of
the bill.